clearXchange Adds Capital One to P2P Payments Network

clearXchange gets a boost from adding a new bank, and considers new strategies to attract users.

Bank-owned P2P payments network clearXchange still faces a major challenge in attracting new customers; that challenge being that many potential customers aren’t aware of clearXchange, says Mike Kennedy, clearXchange’s CEO. The network may have helped address that challenge this week by adding Capital One, the seventh largest bank in the U.S., to its network.

The addition of Capital One along with J.P. Morgan Chase, Wells Fargo and Bank of America means clearXchange now has 4 out of the 7 largest banks in the U.S. Including FirstBank, the network’s fifth member, clearXchange now has more than 85 million potential users from its member banks’ online banking users.

But gaining more users from that base of online banking customers will require spreading awareness about the service, and clearXchange is now contemplating different strategies to address this issue, Kennedy says. One possible solution they are considering is to brand clearXchange rather than white label the solution for its member banks, he adds.

“We’ve felt to date that the banks are in the best place to do the branding and marketing. But we’re evaluating that strategy now and seeing if the benefits of network branding justify changing our strategy,” Kennedy shares.

Although new entrants -- including Amazon -- are starting to enter the P2P payments market, Kennedy sees the new competition as an overall positive for clearXchange. “[The new entrants] validate our space. Customers want to move away from using cash and checks to using digital payments. And we believe customers want to do that through their bank because that is who they feel most comfortable with,” he notes.

clearXchange also has an advantage in being able to leverage the years of work and investment that its member banks have put into online security, Kennedy says. “Security is one of our value propositions… doing [P2P payments] through their bank means they don’t have to provide their personal or card info to a third party,” he explains. “We leverage the online security of our member banks, and we help facilitate the sharing of best practices among the banks in the network to help improve its overall security.”

Jonathan Camhi has been an associate editor with Bank Systems & Technology since 2012. He previously worked as a freelance journalist in New York City covering politics, health and immigration, and has a master's degree from the City University of New York's Graduate School ... View Full Bio